Key facts
- Phoenix Tailings is building a plant in Texas to produce rare-earth magnet material.
- The company uses mining waste and recycled magnets as raw materials.
- The Pentagon has provided Phoenix Tailings with a $500 million loan.
- Critical minerals are essential for U.S. weapons systems, including missiles.
- Phoenix Tailings aims to reduce Western Hemisphere reliance on China for rare-earth elements.
Phoenix Tailings, an American company backed by the Pentagon and Toyota, is constructing a full-scale plant in Texas to produce a key ingredient for high-performance magnets. This initiative aims to decrease the U.S. reliance on China for critical minerals, which are vital for defense systems and advanced technology.
The company utilizes waste from traditional mining, as well as recycled magnets and disk drives, as its primary raw materials. This approach addresses China's dominant position in the processing of critical minerals. Phoenix Tailings' chief commercial officer, Anthony Balladon, stated the purpose of the facility is to ensure the Western Hemisphere is free from Chinese influence in the rare-earth sector.
The U.S. government views the lack of domestic critical mineral production as a significant national security threat. The Trump administration has been actively working to build a domestic supply chain, including executive orders restricting defense contractors from sourcing materials from U.S. adversaries. The federal government has invested approximately $10 billion in the critical minerals sector between January 2025 and June 30, 2026, according to the Council on Foreign Relations U.S. Government Deal Tracker.
Critical minerals are indispensable for U.S. military technology, used in everything from guidance systems for missiles to stealth coatings for aircraft. Despite the urgency and federal investment, building new mines and boosting production of essential components like high-powered magnets will take years. Phoenix Tailings' current capacity for producing samarium, a metal crucial for defense systems, is limited, but the company plans to scale up significantly in the coming years.